Cintas Corporation Announces Fiscal 2013 Second Quarter Results

December 20, 2012 04:15 PM Eastern Standard Time

CINCINNATI--(BUSINESS WIRE)--Cintas Corporation (Nasdaq:CTAS) today reported results for its
second quarter ended November 30, 2012. Revenue for the second quarter
was $1.06 billion, representing a 4.0% increase compared to last year’s
second quarter. Organic growth, which adjusts for the impact of
acquisitions, compared to last year’s second quarter, was 3.4%. Recycled
paper prices remained lower than last year, and this negatively impacted
second quarter consolidated revenue by $5.5 million, or 0.6%, compared
to last year’s second quarter.

The Company’s operating income of $139.0 million was a 4.8% increase as
compared to last year’s second quarter. Net income increased 4.9% to
$78.0 million as compared to $74.4 million in last year’s second
quarter. Earnings per diluted share (EPS) for the second quarter were
$0.63, a 10.5% increase over the $0.57 earnings per diluted share in
last year’s second quarter.

Scott D. Farmer, Chief Executive Officer, stated, “We continued to
operate during the second quarter in a climate of much economic
uncertainty. These uncertainties, largely regarding U.S. tax policies
and changing healthcare regulation and costs, caused our customers to be
very cautious about both spending and hiring.”

The Company’s balance sheet and cash flow remain very strong. Cash and
marketable securities totaled $276.3 million at November 30, 2012. Cash
flow from operations in the first half of fiscal 2013 improved to $227.3
million, a 29.2% increase over the first half of last fiscal year. As of
November 30, 2012, the Company’s current ratio was 2.7 to one, and its
debt to EBITDA was 1.9 to one.

During the second quarter of fiscal 2013, the Company purchased 1.9
million shares of its common stock at an aggregate cost of $81.1
million. While it had no impact on the second quarter EPS, this buyback
is expected to benefit fiscal year 2013 EPS by approximately $0.01. The
Cintas Board of Directors authorized a $500.0 million share buyback
program in October 2011. As of November 30, 2012, the Company had $218.7
million available under the current Board authorization for future share
repurchases.

Mr. Farmer concluded, “Based on our second quarter results and the
uncertain U.S. economic climate, we are updating our fiscal 2013 revenue
expectations to be in the range of $4.275 billion to $4.325 billion. We
are not changing our EPS guidance, which is an expectation of fiscal
2013 EPS to be in the range of $2.50 to $2.58. This guidance assumes no
further deterioration in the U.S. economy and does not consider any
additional share buybacks.”

About CintasHeadquartered in
Cincinnati, Cintas Corporation provides highly specialized services to
businesses of all types primarily throughout North America. Cintas
designs, manufactures and implements corporate identity uniform
programs, and provides entrance mats, restroom supplies, promotional
products, first aid, safety, fire protection products and services and
document management services for over one million businesses. Cintas is
a publicly held company traded over the Nasdaq Global Select Market
under the symbol CTAS and is a component of the Standard & Poor’s 500
Index.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTSThe Private
Securities Litigation Reform Act of 1995 provides a safe harbor from
civil litigation for forward-looking statements.Forward-looking
statements may be identified by words such as “estimates,”
“anticipates,” “predicts,” “projects,” “plans,” “expects,” “intends,”
“target,” “forecast,” “believes,” “seeks,” “could,” “should,” “may” and
“will” or the negative versions thereof and similar words, terms and
expressions and by the context in which they are used.Such
statements are based upon current expectations of Cintas and speak only
as of the date made.You should not place undue reliance on any
forward-looking statement.We cannot guarantee that any
forward-looking statement will be realized.These statements are
subject to various risks, uncertainties, potentially inaccurate
assumptions and other factors that could cause actual results to differ
from those set forth in or implied by this Press Release.Factors
that might cause such a difference include, but are not limited to, the
possibility of greater than anticipated operating costs including energy
and fuel costs, lower sales volumes, loss of customers due to
outsourcing trends, the performance and costs of integration of
acquisitions, fluctuations in costs of materials and labor including
increased medical costs, costs and possible effects of union organizing
activities, failure to comply with government regulations concerning
employment discrimination, employee pay and benefits and employee health
and safety, uncertainties regarding any existing or newly-discovered
expenses and liabilities related to environmental compliance and
remediation, the cost, results and ongoing assessment of internal
controls for financial reporting required by the Sarbanes-Oxley Act of
2002, disruptions caused by the inaccessibility of computer systems
data, the initiation or outcome of litigation, investigations or other
proceedings, higher assumed sourcing or distribution costs of products,
the disruption of operations from catastrophic or extraordinary events,
the amount and timing of repurchases of our common stock, if any,
changes in federal and state tax and labor laws, the reactions of
competitors in terms of price and service and the finalization of our
financial statements for the quarter ended November 30, 2012.Cintas
undertakes no obligation to publicly release any revisions to any
forward-looking statements or to otherwise update any forward-looking
statements whether as a result of new information or to reflect events,
circumstances or any other unanticipated developments arising after the
date on which such statements are made.A further list and
description of risks, uncertainties and other matters can be found in
our Annual Report on Form 10-K for the year ended May 31, 2012 and in
our reports on Forms 10-Q and 8-K.The risks and uncertainties
described herein are not the only ones we may face. Additional risks and
uncertainties presently not known to us or that we currently believe to
be immaterial may also harm our business.

The press release contains non-GAAP financial measures within the
meaning of Regulation G promulgated by the Securities and Exchange
Commission. To supplement its consolidated financial statements
presented in accordance with U.S. generally accepted accounting
principles (GAAP), the Company provides additional measures of
operating results, net earnings, net margin and earnings per share
adjusted to exclude certain costs, expenses and gains and losses.
The Company believes that these non-GAAP financial measures are
appropriate to enhance understanding of its past performance as well
as prospects for future performance. A reconciliation of the
differences between these non-GAAP financial measures with the most
directly comparable financial measures calculated in accordance with
GAAP is shown below.

Management believes the ratio of debt to earnings before interest,
taxes, depreciation and amortization (EBITDA) is valuable to
investors, particularly investors of the company's debt, because it
is a common metric that reflects the company's earnings and cash
flow available for debt service payments.